Many of the previous forms have been eliminated including the Short Sale Agreement (SSA), the Request for Approval of Short Sale (RASS) and Alternative Request for Approval of Short Sale (Alt RASS). The SSA form has been changed to the Short Sale Notice (SSN). Previously, the SSA was an offer from the lender that the borrower accepted or rejected. Now, the SSN is simply a unilateral notice that gives the borrower the right to proceed with a short sale under specified terms.

• The borrower may apply for HAFA directly. Not qualifying for HAMP (loan modification) or failing to successfully complete a trial period is no longer a condition of HAFA eligibility.
• The loan is delinquent or default is reasonably foreseeable. Loans currently in foreclosure or bankruptcy are eligible.
• The loan is secured by a 1 to 4 unit property. There is no longer a requirement that the property be owner occupied. Nor is there a limit on the number of properties owned by a borrower that may be approved under HAFA. Tenant occupied or vacant properties may be eligible.
• The loan must be a first trust deed originated before Jan. 1, 2009.
• The borrower’s hardship must be verified by the lender. Borrower must sign a Hardship Affidavit or Request for Modification Assistance (RMA) wherein the borrower has represented that he or she does not have sufficient liquid assets to make the monthly mortgage payments.
• The borrower must not have been convicted of a felony larceny, theft, fraud, forgery, money laundering, or tax evasion in connection with a mortgage or real estate transaction within the last 10 years (the borrower must sign Dodd-Frank Certification to that effect).
• Current unpaid principal balance must be less than the following: 1 Unit $729,750, 2 Units $934,200, 3 Units $1,129,250, 4 Units $1,403,400.
• The borrower is a real person, not an LLC or corporation.
• The property securing the loan is not condemned.

• $3,000 for relocation expenses to borrower, tenant or non-borrower occupant who occupies property as principal residence and is required to vacate as a condition of the HAFA short sale. $3000 is the total incentive no matter how many occupants.
• $1,500 to lender/servicer to cover administrative and processing costs
• $2 reimbursement to investor for every $3 paid to extinguish junior liens, up to $5,000 maximum.

Step 1: If a borrower who was not previously evaluated for HAMP requests a short sale, the lender must acknowledge request within 10 days and provide borrower with copy of Hardship Affidavit and description of HAFA evaluation process. Lender must consider borrower for HAFA Short Sale even if borrower did not specifically request it.

Or

Step 1: Lender must consider possible HAMP-eligible borrower for HAFA within 30 days of not qualifying for a Trial Period Plan (TPP), not successfully completing a TPP, or losing good standing on HAMP modification. Lender must then proactively notify borrower of eligibility.

Step 2: Borrower has 14 days after notification to request short sale. Or a borrower may initiate short sale request on his or her own. (But a borrower cannot participate in a HAFA pre-approved short sale and TPP at the same time).

Step 3: Lender has 10 days to acknowledge borrower’s request.

Step 4: Borrower delivers back Hardship Affidavit or other documents, if so required.

Step 5: Lender issues Short Sale Notice (SSN) or other pre-approval notice within 30 days of request for short sale.

Step 6: Borrower lists property for sale using a licensed real estate agent.

Step 7: Borrower does not sign or “accept” the SSN. The SSN is a unilateral pre-approval that gives the borrower the right to proceed with a short sale.

Step 8: The lender’s SSN must fix a termination date of at least 120 days from the effective date of the SSN.

Step 9: Borrower and agent market and sell the property.

Step 10: Within three business days following receipt of an executed purchase offer, borrower submits it to the lender along with other requested documents.

Step 11: Lender approves sale within 10 business days.

Step 12: Sale closes escrow.

Alternative Procedure where borrower has executed purchase offer prior to receiving HAFA pre-approval

Step 1: A borrower submits to lender executed sales contract to request short sale

Step 2: Lender Acknowledges receipt within 10 days using the Acknowledgement of Request for Short Sale form (ARSS) or similar form

Step 3: Borrower provides any additional documentation requested within 14 days including the Hardship Affidavit if necessary

Step 4: Lender verifies eligibility and approves or disapproves sale or makes a counter within 30 days of receipt of all offer documents.

When a borrower who was not previously evaluated for HAMP requests a short sale the lender must determine the basic eligibility of the borrower and obtain a completed Hardship Affidavit (or RMA).

• A fixed termination date to be a minimum of 120 calendar days from the Effective Date of the SSN.
• A requirement that the property be listed with a licensed real estate professional who is regularly doing business in the community where the property is located.
• Either a list price or net proceeds acceptable to the lender.
• Notice that the borrower is responsible for property maintenance and repair from Effective Date
• The amount of closing costs or other expenses the lender will permit to be deducted from the gross sale proceeds.
• An agreement to fully release borrower from all liability for repayment of the loan.
• An agreement not to complete a foreclosure sale if borrower complies with SSN.
• Amount of acceptable closing costs and up to 6% real estate commission.
• Notice that the sale must be an arm’s length transaction.
• Notice that the buyer must agree not to resell the property within 30 days of closing and for sales between 31 and 90 days after closing, the buyer cannot sell property for more than 120% or the HAFA short sale price.
• The borrower, tenant or other non-borrower occupant will be entitled to assistance of $3,000, as applicable